Jakks profit and revenues drop in Q1

Company reports a loss of $10.6 million, but expects sales to rise over the year.
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Jakks Pacific has reported results for its first quarter, ended March 31st, 2011.

Net sales for the first quarter of 2011 were $72.3 million, compared to $77.3 million in Q1 2010.

Jakks also reported a loss for the period of $10.6 million, compared to a loss for the first quarter of 2010 of $5.2 million, which included a tax benefit adjustment of $4.9 million.

Excluding the tax benefit adjustment, the 2010 first quarter loss would have been $10.1 million.

Stephen Berman, president and CEO, Jakks Pacific, commented: “2011 started off favourably, with our net sales exceeding and our earnings meeting the high end of our guidance ranges for the first quarter and our fall lines proceeding on plan.

“So far, our gross margin is up over last year and we anticipate being able to achieve continued margin improvement in the second half of the year as a result of our ongoing commitment to closely managing our supply chain.

“We remain pleased with our broad array of products which have widespread placement at retail. We expect the top contributors to be Disney Princess and Disney Fairies dolls, dress-up and pretend products, as well as the I Am T-Pain Microphone, SpyNet electronics, Cabbage Patch Kids dolls, Pokémon toys, Halloween costumes and other toys related to several movie properties, including Cars 2.

"We are also working on a number of exciting initiatives for our future including our new animated television show and related toy product line Monsuno."

Joel Bennett, executive VP and CFO, added: “We have been closely watching the acquisition landscape in search of quality additions to our portfolio.

"Using our disciplined approach, we continue to look for accretive acquisitions to complement the growth of our business and effectively deploy our capital."

Berman concluded: "At this point we are still anticipating an increase in net sales for 2011 over last year of three to four per cent to approximately $770 to $775 million, with diluted EPS in the range of $1.32 to $1.35, an increase of four to six per cent over fiscal 2010 adjusted EPS of $1.27, which excludes 2010’s tax benefit adjustments and one-time benefit payment made to the estate of Jack Friedman, our deceased chairman and former co-CEO.

"We continue to have strong confidence in the future prospects for Jakks Pacific and its shareholders."

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